11 June 2004 16:20
Russian tax reduction bill passes second reading
Moscow, 11 June: The draft federal law on reducing the maximum single social tax from 35.6 to 26 per cent passed the
second reading in the State Duma [lower house of parliament] today.
The bill stipulates that the maximum tax rate will be applied if an employee's annual salary is under R280,000
[about 9,500 dollars]. Incomes that exceed R600,000 [about 20,000 dollars] a year will be taxed using the minimum rate -
2 per cent. The single social tax is the main source of income for the pension fund as well as for the medical and
social insurance funds.
Presenting the bill in parliament, Deputy Chairman of the Budget and Tax Committee Andrey Makarov emphasized that the
reduction of the single social tax rate would make it possible to increase wages and draw them out of the shadow sector.
According to his calculations, about R30bn [1bn dollars] will be taken out of the shadow sector and will go to regional
budgets in the form of taxes.
Health and Social Reform Minister Mikhail Zurabov assured MPs that the reduction of the social tax rate would not
affect pensions or medical and social insurance payments.
[ITAR-TASS news agency] |
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